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Mr. Lieberman, a powerful but polarizing figure, wrote on his Facebook page, “I know that I committed no crime,” but said he was stepping down so “I will be able to put an end to this matter swiftly and without delay and to clear my name completely.”

Mr. Lieberman, who is also a member of Parliament, indicated that he still hoped to compete in the Jan. 22 balloting, suggesting a possible plea bargain. The expected indictment, which prosecutors announced on Thursday, concerns a relatively minor offense compared with a broader case of money laundering and fraud that was dropped after an investigation stretching for more than 12 years.

“I believe that the citizens of the State of Israel are entitled to go to the polling stations after this matter has already been resolved,” Mr. Lieberman’s statement said. If a legal ruling could be made before the elections, “I might continue to serve the State of Israel and the citizens of Israel as part of a strong and united leadership that will cope with the security, political and economic challenges facing the State of Israel.”

Mr. Lieberman, 54, leads the secular, ultranationalist Yisrael Beiteinu party, which joined forces in October with Prime Minister Benjamin Netanyahu’s Likud Party. A populist immigrant from the former Soviet Union, he was widely considered as a potential successor to Mr. Netanyahu as leader of Israel’s right wing, though his hard line on the Palestinian question, among other issues, alienated many Western allies.

After the charges were announced, Mr. Lieberman told supporters that he had been hounded by corruption accusations since July 1996, when he served as a top aide to Mr. Netanyahu during his first term as prime minister. “Since then till today, not a day has passed without me being referred to as ‘a suspect,’ ‘being under investigation,’ ‘being an intelligence target,’ ” Mr. Lieberman said. “This has been one long and rolling case, receiving a different title every now and then.”

The conduct for which Mr. Lieberman will face indictment stems from an investigation into other allegations. He is accused of promoting Israel’s former ambassador to Belarus for another post after the ambassador gave him confidential information regarding an Israeli police investigation into Mr. Lieberman’s activities.

But Mr. Lieberman will not face charges on the underlying, more serious case, in which he was suspected of receiving millions of dollars from international tycoons with business interests in Israel through companies formally led by family members or associates.

Israel’s attorney general, Yehuda Weinstein, said Thursday in a report announcing his decision that he could not adequately prove a link between Mr. Lieberman and the money, though he said, “The suspicions against Lieberman’s series of intricate and intertwined, underhanded actions cannot be ruled out.”

Born in Moldova, Mr. Lieberman enjoys wide support among Israel’s one million immigrants from the former Soviet Union. He lives in a West Bank settlement considered illegal under international law, and he is perhaps the government’s harshest critic of President Mahmoud Abbas of the Palestinian Authority, having called for his ouster and denounced as “diplomatic terrorism” his recent bid for upgraded Palestinian status at the United Nations.

Polls have consistently shown that Mr. Lieberman’s joint ticket with Mr. Netanyahu, known here as Likud Beiteinu, is expected to receive up to 40 of the 120 seats in Israel’s next Parliament, by far the largest bloc. The merger was seen as crowning him a top contender to eventually follow Mr. Netanyahu as prime minister.

Opposition leaders, who on Thursday had called for Mr. Lieberman’s resignation, were swift to embrace it on Friday, but not without adding jabs.

Zahava Gal-On, chairwoman of the left-wing Meretz party, said Mr. Lieberman had “spared himself ignobility and disgrace” by stepping down, according to the Web site of Channel 2 News. Shelly Yacimovich, chairwoman of the Labor Party, said he had “severely undermined the rule of law and damaged the public’s faith in its elected officials and democracy.”

Tzipi Livni, a former foreign minister who now heads the new Hatnua Party, issued a more moderate statement, saying: “Avigdor Lieberman performed the right and necessary action. We hope he will receive a swift legal proceeding.”

Mr. Netanyahu had no immediate comment on Mr. Lieberman’s resignation Friday, but on Thursday had offered only support. “I believe in Israel’s legal system and respect it,” the prime minister said in a statement. “The right that it grants any Israeli citizen to defend himself also extends to Minister Lieberman, and I hope for him that he’ll be able to prove that he’s also innocent regarding the only case that remains.”

Under Israeli law, when a cabinet minister resigns, the prime minister becomes “custodian” of his portfolio, and Mr. Netanyahu is expected to handle foreign affairs himself at least until after the elections.

AG to indict Lieberman on charges of fraud and breach of trust; Lieberman suggests he will try to secure plea bargain before elections; top officials in Likud Beiteinu: Lieberman to remain number 2 on joint ticket, will run in elections; Netanyahu tells Lieberman he hopes he proves his innocence and returns quickly to government.

By Barak Ravid and Jonathan Lis, Ha’aretz
December 14, 2012

Foreign Minister Avigdor Lieberman announced Friday that he plans to resign from his position, following the Attorney General’s decision to indict him on charges of fraud and breach of trust.

Lieberman suggested that he will try to secure a plea bargain before the upcoming elections in January, and added that he made the decision following deliberations with his lawyers, despite the fact that he was told he was not obligated to resign from his position as foreign minister.

Prime Minister Benjamin Netanyahu spoke with Lieberman on Friday, and told him that he hoped he would prove his innocence soon, even in the one case that remains on the agenda, and that he will quickly return to serving in a senior government position.

Senior officials in Likud Beiteinu stressed that Lieberman will remain number two on the joint ticket, and will still run in the elections for the 19th Knesset. Deputy Foreign Minister Danny Ayalon will likely replace Lieberman until the elections in January. If the Lieberman case would not be decided on until the elections, Yair Shamir will be the senior minister on the Yisrael Beiteinu list.

“Even though I know I did not commit any crime… I decided to resign from my post as foreign minister and deputy prime minister and remove my immunity,” Lieberman announced Friday. “Following 16 years of investigations against me, I will now be able to end this matter quickly and without delays, and finally clear my name.”

“I am doing this also because I believe that the citizens of Israel are entitled to go to the polls after the matter has been decided on, that is to say, that a legal ruling will be decided on before the elections and this way I will be able to continue to serve the state of Israel and its citizens as part of a strong, united leadership that would tackle the security, diplomatic, and economic challenges facing Israel.”

Labor Party chair Shelly Yacimovich responded to the announcement Friday, saying, “This was obvious. We were left with a bad taste in our mouths from the prime minister’s shameful congratulations to his number two Lieberman last night after the (attorney general’s) decision to indict him. This is a serious cultural decline.”

The Hatnuah party, headed by former opposition leader Tzipi Livni said in response: “Avigdor Lieberman did what was right and what was called for,” and wished him a speedy trial.

Attorney General Yehuda Weinstein on Thursday said he was closing the main case against Foreign Minister Avigdor Lieberman, concluding a 12-year investigation into allegations of money laundering and fraud. However, Weinstein said he would indict Lieberman on lesser charges of fraud and breach of trust, in the case concerning Israel’s former ambassador to Belarus.

Several political parties [have] called on Lieberman to resign since Thursday.

The Labor Party stated that Lieberman’s conduct, both legally and morally, “endangered and still endangers Israeli democracy and the rule of law.”

“I won’t join a government with someone sitting on the defendant’s bench, who has been indicted,” said Yacimovich on Friday.

“I cannot believe that a person can sit on the defendant’s bench, and serve as a minister in the government at the same time,” continued Yacimovich.

Meretz party chairperson Zahava Gal-On on Friday petitioned the High Court of Justice to order Foreign Minister Avigdor Lieberman to step down, as he is set to be indicted for breach of trust over an incident involving Israel’s former ambassador to Belarus, Ze’ev Ben Aryeh.

The resignation of Israel’s ultra-nationalist and belligerent foreign minister, Avigdor Lieberman, indicted this week on charges of fraud and breach of trust, signals a significant shift in the politics of the country’s right.

As Israel has swung ever further rightwards in the 12 years since the outbreak of the second intifada and collapse of the peace process, Lieberman has come to be seen as emblematic of some of the harshest aspects of Israeli domestic and foreign policy concerns, not least for his suggestion that Israeli Arabs be transferred out of the country by redrawing its border in exchange for the surrender of Israeli settlement blocs on the West Bank.

From the outset he has been a controversial figure prone to making inflammatory statements. In 1998, Lieberman reportedly suggested Israel could bomb the Aswan high dam and flood Egypt. At various times he has called for the expulsion of Israel’s Arab population, the “execution” of Arab MPs who met with leaders of Hamas, and proposed an oath of loyalty from Israeli citizens without which they would not receive the right to vote or social services.

The announcement of his resignation, a day after the decision to prosecute him by Israel’s attorney general, comes only a month before elections that the new coalition party formed by Lieberman and the prime minister, Binyamin Netanyahu, had been expected to win easily. That outcome has been thrown into disarray. In the interim period the foreign affairs role will reportedly be subsumed into Netanyahu’s office.

Israel’s justice ministry announced on Thursday it would charge Lieberman over alleged irregularities tied to the promotion of an Israeli diplomat who had leaked to him privileged information about a police investigation into his activities. His resignation comes despite the fact Lieberman apparently believes the remaining charges were not serious enough for him to stand down.

On Thursday, in the immediate aftermath of the prosecution announcement, Lieberman insisted he would remain. The prospect of being forced to stand down by a high court ruling appears to have persuaded him to change his mind. He will, however, still stand as an MP in January’s elections and retain his number two place on the joint Likud-Beiteinu list, which would, if he were cleared, enable him to choose one of the top three offices – the foreign ministry, the treasury or the defence ministry. More serious allegations, including money-laundering and bribery, were dropped.

Born in Moldova, Lieberman emigrated to Israel where he quickly emerged as a deeply controversial nationalist politician who embraced a dangerously populist rhetoric. Only this week Lieberman, with typical hyperbole, accused the international community, and Europe in particular, of being willing to “sacrifice” Israel, as Europe “sacrificed Czechoslovakia in 1938″ to “radical Islam”. “My sense,” he told an audience that included diplomats, “is that all the promises and commitments to Israel’s security are mere words. When push comes to shove, many key leaders would be willing to sacrifice Israel without batting an eyelid in order to appease the radical Islamist militants and ensure quiet for themselves.”

Emigrating to Israel in 1978 Lieberman worked briefly as a bouncer in a nightclub, joining Netanyahu’s Likud party early on and becoming Netanyahu’s chief of staff when he was elected prime minister in 1996. He was thrust to real prominence, however, when he formed his own party, Yisrael Beiteinu, or Our Home is Israel, which has wide support among Russian emigrants to the country.

Although the electoral coalition between Likud and Yisrael Beiteinu had seemed like a shoo-in after the recent Israeli assault on Gaza, support had slipped even before the announcement of the decision to prosecute Lieberman and his resignation. The unanswered question is what impact his resignation will have on that trend.

Especially problematic for Netanyahu’s coalition is the fact that Lieberman is regarded as Yisrael Beiteinu’s most visible and important electoral asset, suggesting it would be damaged if he is sidelined for the remainder of the campaign.

A poll for the media group that owns the Jerusalem Post suggests the party would win seven seats fewer than in the present government, not least because of a widespread perception that Israel’s international position has worsened in the past four years. It also suggests that far from the electorate moving back towards the centre, the biggest beneficiary would be other rightwing parties.

Crucially for the Israeli prime minister, Lieberman was regarded as a reliable and close ally in the war party in the Israeli cabinet over Iran and its nuclear programme.

His resignation, in many respects, was unavoidable. In 2009 Lieberman promised in the Knesset that he would stand down immediately if he was indicted, a promise other parties appeared determined to hold him to this week.

JERUSALEM – A day after government prosecutors announced plans to indict him for breach of trust, Israeli Foreign Minister Avigdor Lieberman said Friday he would step down from office and focus on resolving the criminal case against him.

Most viewed the resignation as a strategic move on the part of the combative right-wing politician rather than a capitulation.

Lieberman, who has denied any wrongdoing, hinted that he would attempt to reach a plea bargain in the charges before the Jan. 22 national election. He will remain a candidate in the poll and is virtually assured a seat in the next Knesset, or parliament.

“Following 16 years of investigations against me, I will now be able to end this matter quickly and without delays and finally clear my name,’’ Lieberman said Friday in a statement.

His decision followed Thursday’s announcement by Atty. Gen. Yehuda Weinstein that Lieberman would be indicted on charges of promoting the Israeli ambassador of Belarus after the diplomat gave him confidential materials related to the government probe against Lieberman.

But at the same time, prosecutors dropped a more serious money-laundering case that alleged Lieberman secretly received millions of dollars from businesspeople through shell companies.

It remained unclear who would replace Lieberman as foreign minister during the next two months, until a new government is elected and formed.

Israeli Prime Minister Benjamin Netanyahu might opt to absorb the duties himself during the interim period or appoint a caretaker minister, government officials said.

Lieberman will remain head of the nationalist Yisrael Beiteinu party, which is running in next month’s elections on a joint slate with Netanyahu’s Likud party.

If he is unable to resolve the criminal case before the elections, Lieberman could still serve in the Knesset while the case is pending, but he would be unable to serve as a top minister.

The leader of Israel’s Meretz Party petitioned the country’s Supreme Court to order the resignation of Foreign Minister Avigdor Lieberman following his indictment on fraud.

Liberman “seriously undermines the confidence of the public and his voters” by refusing to resign after his indictment, the chairwoman of the left-wing Meretz party, Zahava Gal-On, wrote in her petition on Dec. 13, according to Israel’s Army Radio.

A series of investigations, some more than 12 years old, culminated this week in the closing of some cases and Liberman’s indictment on fraud and breach of trust.

In the Dec. 13 indictment, Attorney General Yehuda Weinstein alleged Liberman advanced former ambassador to Belarus Ze’ev Ben Aryeh’s position in the Foreign Ministry in exchange for information about an investigation against Lieberman being conducted in Belarus. Ben Aryeh has acknowledged passing documents onto Lieberman in 2008.

“These charges against a presiding official undercut the basic elements of standards of government,” Gal-On wrote.

Other opposition figures have also called on Liberman to step down.

Lieberman previously had committed to resigning from his Knesset position if he was indicted on the main case, which involved allegations of money laundering and obstruction of justice, but never mentioned the Ben Aryeh case. It is unclear if he will be required to resign if he is convicted.